12.4 Garage Coverage Form and Garagekeepers
Key Takeaways
- The Garage Coverage Form (CA 00 05) is a hybrid combining auto liability (via symbols) and CGL-like premises/operations liability for dealers and repair risks.
- Garage liability splits into 'covered autos' (BI/PD from autos) and 'other than covered autos' (premises/operations) exposures.
- Garagekeepers covers the garage's liability for physical damage to customers' autos in its care, custody, or control — filling the care-custody-control gap.
- Garagekeepers is written on legal liability (pays only if garage is at fault), direct primary, or direct excess bases.
- Garage liability (third-party BI/PD) and Garagekeepers (damage to customers' autos) are separate insuring agreements with separate limits — never conflate them.
The Auto-Dealer Problem
An auto dealer, repair shop, or service station has two exposures the Business Auto form cannot fully solve: (1) ordinary business operations liability resembling a Commercial General Liability (CGL) risk, and (2) the unique garage exposure of having customers' autos in their care. ISO answers with the Garage Coverage Form (CA 00 05) and, for non-dealer repair risks, the Auto Dealers Coverage Form (CA 00 25) in newer editions.
The Garage form is a hybrid: it blends auto liability (using covered-auto symbols) with general liability for premises and operations, so a dealer needs only one form instead of a BAP plus a CGL.
Two Liability Sides
| Side | Covers |
|---|---|
| Garage operations – covered autos | BI/PD from ownership, maintenance, or use of covered autos (uses symbols) |
| Garage operations – other than covered autos | Premises and operations liability — the CGL-like exposure (products, completed operations of the garage) |
A customer who trips on the showroom floor is an 'other than covered autos' loss; a test-drive collision is a 'covered autos' loss.
Garagekeepers Coverage
Garagekeepers coverage insures the garage's liability for physical damage to a customer's auto left in the garage's care, custody, or control for service, repair, storage, or parking. It fills the gap left by the standard care-custody-control liability exclusion. It is offered on three bases:
| Basis | Trigger |
|---|---|
| Legal liability | Pays only when the garage is legally liable for the damage (cheapest) |
| Direct primary | Pays for damage to the customer's auto regardless of the garage's fault; primary over the customer's own coverage |
| Direct excess | Pays regardless of fault but only excess over the customer's own auto insurance |
Trap: On a legal liability basis, if a hailstorm damages 20 customer cars and the garage was not negligent, garagekeepers pays nothing — the customer's own comprehensive responds. On a direct basis it would pay regardless of fault.
Limits, Deductibles, and Worked Numbers
Garagekeepers is written with a per-location limit and separate deductibles — typically a small per-auto deductible for collision/comprehensive and sometimes a higher per-event maximum deductible. A common structure is a $60,000 per-location limit with a $100 per-auto / $500 per-event deductible for other-than-collision.
Worked example (direct-basis hail event): A storm damages 12 customer cars, total repair $48,000. Garagekeepers per-location limit $60,000; deductible $100 per auto, $500 per-event maximum. Deductible applied = lesser of (12 x $100 = $1,200) or the $500 per-event cap = $500. Garagekeepers pays $48,000 - $500 = $47,500 (within the $60,000 limit).
Who Counts as a Garage Insured
The form's insured includes the named insured and, for covered-auto liability, employees and others using a covered auto in the garage business — but customers are generally not insureds, and using a customer's auto for a purpose unrelated to the garage business is not covered.
Exam Differentiators
- Garage liability = the garage's liability to third parties (BI/PD), including bodily injury from defective repair work.
- Garagekeepers = the garage's liability for physical damage to customers' autos in its care.
- The two are separate insuring agreements with separate limits — do not conflate them.
Tip: If the loss is the customer's CAR being damaged while at the shop, think Garagekeepers. If the loss is a third party hurt by the garage's operations, think Garage liability.
The Garage Form's Built-In Exclusions
The Garage form mirrors the BACF's liability exclusions and adds garage-specific ones. It excludes damaged work the garage performed (the faulty-repair piece itself, akin to the CGL 'your work' concept), defective products the garage sold, and expected or intended injury. It also excludes liability assumed under contract beyond the insured's own negligence. These parallel CGL exclusions because the Garage form absorbs the general-liability role for the dealership.
Auto Dealers Coverage Form
Newer ISO editions split dealer risks onto the Auto Dealers Coverage Form (CA 00 25), which packages auto liability, general liability, garagekeepers, and dealers' driveaway and false-pretense coverages into one contract. False-pretense coverage answers a classic dealer loss: a thief who buys a car with a bad check or a stolen identity and drives off. Recognizing that the Auto Dealers form bundles these specialty exposures distinguishes it from the plain Garage form on the exam.
A repair shop carries Garagekeepers on a LEGAL LIABILITY basis. A tornado the shop could not have prevented destroys eight customer vehicles parked in the lot. How does Garagekeepers respond?
A customer is injured slipping on a spill in the dealership showroom (not involving any auto). Under the Garage Coverage Form, this loss is covered as:
Garagekeepers Coverage Triggers and a Worked Limit
Garagekeepers insurance protects a garage business for damage to customers' vehicles left in its care, custody, or control. Because the customer's own auto policy may also apply, the exam tests the three coverage triggers the business can select.
| Garagekeepers basis | The garage pays when |
|---|---|
| Legal liability | The garage is legally responsible (negligent) for the damage |
| Direct primary | Damage occurs regardless of fault; garage pays first |
| Direct excess | Pays only after the customer's own coverage is exhausted |
Worked limit example: a fire at the shop destroys 20 customer cars worth $600,000 total. Garagekeepers carries a $500,000 limit and a $1,000 per-vehicle / $5,000 maximum deductible. On a direct basis the form pays up to $500,000 less the deductible, regardless of the shop's fault. On a legal liability basis it pays nothing unless the shop's negligence caused the fire.
Exam Trap: A dealer's own inventory (autos held for sale) is not covered by Garagekeepers - it is covered as the dealer's owned autos / dealers physical damage. Garagekeepers is strictly for customers' autos.